German Utility Giant to Appeal

Published
7:00 pm EST, Saturday, January 19, 2002

Utility giant E.On AG will appeal to the German government to back its plan to acquire the country's dominant gas company and support its drive to become a force in the global power industry, E.On's chairman, Ulrich Hartmann told a newspaper Sunday.

E.On, Europe's No. 2 electricity company, said Saturday that the German Cartel Office had blocked its takeover of a unit of Britain's BP PLC _ a key move in a complex plan to buy a $5.3 billion majority-stake in Ruhrgas AG.

Regulators are concerned about how the deal would strengthen the position of E.On in the German power market. Ruhrgas supplies more than 60 percent of Germany's natural gas and dominates its distribution.

Hartmann told the Frankfurter Allgemeine Sonntagszeitung that he hoped Economics Minister Werner Mueller would recognize that Ruhrgas faces fierce competition from international rivals such as Exxon and Gaz de France.

"We have the chance to put German companies into internationally important positions in electricity and gas," Hartmann was quoted as saying.

Mueller, a former utility executive, has expressed support for the deal.

E.On has taken advantage of the deregulation of power markets to expand. Last year, it bought British rival Powergen PLC for $7.4 billion to gain a foothold in the British and U.S. electricity markets.

BP subsidiary Gelsenberg holds 25.5 percent of Rurhgas. E.On already reached agreement with ThyssenKrupp, Vodafone and RWE to buy their stakes in a unit that holds 34.8 percent of Ruhrgas.

The Cartel Office is to present its findings on the bid for Gelsenberg on Monday.

A ruling by the Economics Ministry would take about four months, Hartmann said.